Apple Case Essay

878 words - 4 pages

Apple computer and its strategic operationProsSales of its iPod music player had increased its second quarter profits tremendously.The favorable iPod brand perception had also increased sales of Macintosh computers. So iPod gives the company access to a whole new series of segments that buy into other parts of the Apple brand. Sales of its notebooks products are also very high, and represent a huge contribution to income for Apple.The massive profits made could then be pumped into developing news products like iPod Video or better marketing schemes for existing products.Apple Company has the opportunity to develop its iTunes and music player technology into a mobile phone format. It was successful launching iPhone after the Rokr mobile phone device was developed by Motorola which failed in the market.Extending its line of products and contents via video-enable iPod, downloadable TV shows that can be downloaded from at iTunes site.ConsPressure on Apple to increase the price of its music download file, from the music industry itself. Many of these companies make more money from iTunes, downloadable music files, than from their original CD sales.Being successful attracts competition, and Apple works very hard on research and development and marketing in order to retain its competitive position. The popularity of iPod and Apple Mac are subject to demand, and will be affected if and demand falls.There is also a high product substitution effect in the innovative and fast moving IT consumer market. So iPod and MP3 play an important role today, but not Compact Disc (CD). Tomorrow's technology might be completely different. Wireless technologies could replace the need for a physical music player.Apple is superior to its competitors as I will list here below:In the US, the MP3 market can be classified as a monopolistic competition where many buyers and sellers trade over a range of prices because sellers can differentiate their offers to buyers. A clear example is Apple's iPods, which offers a wide range of options to consumers in terms of prices and features, compared to its competitors.With the introduction of the scroll wheel, Apple was able to differentiate his MP3s from the rest of competitors.Developing a good design gave Apple a big push on demand for their iPod players. It was able to capture a great share of the market and to set high prices based on quality, performance and especially design.It offers product as one price per song at 99 cents. With this strategy, competitors have less price leverage to compete with the iPods.Competitors either would have to come up with an unlikely cheap MP3 player or very expensive MP3 that will be very though to sell. In contrast, iPod offers good quality with stylish products at the...

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